Growth and Development in the Global Economy

Growth and Development in the Global Economy

Edited by Harry Bloch

What are the forces behind the increasing globalization of economic life? How does globalization affect the functioning of national economies? What difficulties confront government policymakers in dealing with the global economy? These issues are addressed in this volume by leading specialists. The contributors present a range of unique and varied perspectives from which they consider aspects of the increasing integration of economic life, exploring implications for the functioning of domestic markets in a rapidly changing global economy. The result is a collection of insights that provide a framework for understanding globalization as an economic phenomenon.

Chapter 1: Introduction

Harry Bloch

Subjects: economics and finance, development economics, industrial economics, international economics


Harry Bloch At the beginning of the twenty-first century the world economy is experiencing a very rapid pace of change, particularly change associated with the integration of national markets into a global economy. Change offers the potential for substantial growth and development across both rich and poor countries, but it also poses challenges in the form of volatility, as witnessed by the Asian economic crisis of 1997, and widening inequality, as has been emerging both within and across countries. A difficulty with analysing these opportunities and challenges is that the concerns raised do not fit conveniently within a single sub-discipline of economics. International economics deals with the linkages between national economies, the trade branch focusing on the pattern (size and composition) of flows of products and productive resources across countries and the finance branch focusing on the mechanisms for balancing these flows through exchange rates, relative interest rates and international financial organizations. However, much of the analysis in international economics is based on static equilibrium and fails to deal directly with the process of change that is commonly emphasized in globalization discussions. The economics of growth is more directly concerned with the process of change, but its focus is on growth within a national economy. International linkages affect growth only indirectly through accumulation of productive inputs, transfer of technology or competition that encourages efficiency by domestic producers. In international comparative studies there is evidence that some of these indirect linkages are important. However, the mechanism by which growth is achieved...